DA asks for procurement probe

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The Democratic Alliance (DA) is asking Defence and Military Veterans Minister Lindiwe Sisulu to make work of a Parliamentary Portfolio Committee request that she probes suspicious military procurement deals.

“All contracts entered into by SANDF procurement should be investigated,” says DA shadow deputy defence minister James Lorimer.

“The Minister should now give us a clear and public commitment to a full investigation and tell us when the results of a probe will be made public,” he adds.

Lorimer says the National Assembly’s Portfolio Committee on Defence and Military Veterans asked Sisulu to probe various allegations against a number of individuals and companies some three-and-a-half weeks ago. “Since then she has gone to ground and said nothing on the subject.”

This includes a R142.26 million asset management and stock verification contract that allegedly did not go out on tender but was given to a company linked to the defence official who awarded it and a R108 million contract to clear explosive remnants from two former defence force training areas.

The Star newspaper last month reported the contract was awarded to Classic One Consortium (C1C), a company run by directors linked to Origin Exchange Consulting, “which won another dodgy defence contract in June”.

The Star added the that “businessmen of both companies share an office address with the Department of Defence official in charge of awarding the contracts”, Mthobisi Zondi, head of the Defence Supply Chain Integration Division.

The latest DoD annual report explains the Division “satisfies the day-to-day procurement requirements of the DoD” and is directly accountable to the Secretary of Defence. As such it is a separate organisation from the Defence Materiel Division that is responsible for equipment acquisitions. The two divisions were previously sub-components of the now-defunct DoD Departmental Acquisitions and Procurement Division.

“Both contracted businesses are accused of having no track record of relevant expertise and both won contracts ahead of companies with international experience,” The Star added in its report.

The portfolio committee’s call came after a company called PiLog SA filed papers in the North Gauteng High Court against the Minister of Defence, Zondi and C1C in a bid to overturn the asset management contract.

PiLog alleged in its papers that C1C was not a legally registered business. “The Department of Defence told PiLog that the C1C partners were MJ Pholo, S Twala, T Wood and L Shaw. Wood and Shaw are believed to be Terence Wood and Logan Shaw.

“Both are former directors of Origin Exchange Consulting, which won a tender for R108 million from the defence department in June for clearing unexploded ordnance from old training grounds, despite not having a track record in the business and charging more than R30 million more than a UN-accredited competitor.

“Zondi runs a business which shares an address with Origin Exchange in KwaZulu-Natal. He has previously denied links to Origin Exchange and claims he has been set up,” The Star added.

In the court papers, PiLog said C1C won both an initial R8 million contract for asset management stock verification, following a tender process. But a second, linked, contract, worth R142 million, didn’t go to tender.

The first contract involved an electronic data analysis of the department’s entire database of 1.4 million items, said Lubbe.

The second involved physically verifying up to 25 000 high-value, high-impact, high-risk and compliance-critical items.

PiLog obtained the information on the contract awards by bringing a Promotion of Access to Information Act application against the Department of Defence in April.

The defence procurement committee meeting which handed out the C1C contract also handed out an unadvertised air transport contract – to another business connected to Origin Exchange.

That R7.2 million contract went to Adajet Aviation. Director Ralph “Lawrence” Pietersen is a former MK member whose wife Busisiwe Pietersen is an Origin Exchange director, The Star said.

Last year there was controversy over SANDF flights run by Adajet – previously known as AdaGold – to the Democratic Republic of Congo, as Adajet allegedly charged more than competitors and got more than its share of flights.

The Mail &Guardian last April reported Pietersen and his business partner Shaun Roseveare had previously fought a prolonged legal battle with a rival firm, Dewina, over a R25 million ration pack bid.

Lorimer says the DoD Inspector General is already investigating the ammunition clearing contract.

“One calculation is that the procurement team at the SANDF has spent R265 million on Origin Exchange and businesses linked to it,” he says.

“With [last] week’s shocking revelations of an SANDF in crisis, there is no excuse for allowing money to be wasted on suspicious contracts rather than improving the pay and working conditions of our soldiers.



Pic: Unexploded munitions, in this case 82mm mortar bombs, are common on defence force firing ranges.